This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

A Master at CRM Contd...

Tesco ensured that all its customers received magazines that contained material suited to their lifestyles. The company had worked out a mechanism for determining the advertisements and promotional coupons that would go in each of the over 150,000 variants of the magazine. This had been made possible by its world-renowned customer relationship management (CRM) strategy framework (Refer Exhibit I for a brief note on CRM).

The loyalty card3 scheme (launched in 1995) laid the foundations of a CRM framework that made Tesco post growth figures in an industry that had been stagnating for a long time.

The data collected through these cards formed the basis for formulating strategies that offered customers
personalized services in a cost-effective manner.

Each and every one of the over 8 million transactions made every week at the company's stores was individually linked to customer-profile information.

And each of these transactions had the potential to be used for modifying the company's strategies. According to Tesco sources, the company's CRM initiative was not limited to the loyalty card scheme; it was more of a company wide philosophy.

3] Loyalty cards are a part of 'loyalty programs,' which fall under the domain of customer retention strategies. These cards reward customers when they make purchases from the company in the form of points that accumulate over time. These points can later on be redeemed for cash/gifts/discounts. Thus, they provide incentives to customers for remaining a particular company's customers.